When is the best time to raise the rent on one of your rental properties? Should you keep your rent update and raise it every time there is rise in the market value or is it more important to keep your tenant happy in the long term and don’t raise the rent to meet market?
These are the issues which every property investor must face. Many areas thought-out New Zealand are experiencing a rise in the rental value of properties. This is indeed a reason to celebrate, however many property investors are facing the dilemma of either get the rent in now and raise the rent to meet market or maximise the long term income of the property.
It seems many inexperienced or first time investors have the habit of rushing in, they see interest rates on the rise and rush to maximise their immediate return, this can be a mistake, tenants tend to see small, frequent raises in rent a form of penny pinching and tend to get more than a little annoyed at the landlord.
A more experienced landlord maybe content of allowing the rent to fall about 5% behind market. This will allow for a longer term income due to less vacancy.
If you employ property managers, they will keep you abreat of current changes in the market. Rents in your area could be inversely effect if there is too much supply. A good property manager could save you money in the long term and may be worth considering if you do not feel comfortable setting your own rents.
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